February 2017

Trends and Resources

Business Trends: Anticipated market and pricing impacts from new marine fuel regulations

In October 2016, the International Maritime Organization (IMO) announced that it will implement a new regulation that calls for the sulfur content in marine fuels to be reduced from 3.5% to 0.5%. The new regulation will go into effect in January 2020. This action by the IMO will have a profound impact on the maritime and refining industries worldwide, as well as on the environment. This month’s Business Trends section provides an overview on the anticipated impacts of the IMO’s decision on petroleum product markets.

Tallett, M., Witmer, T., Dunbar, D., EnSys Energy; St. Amand, D., Navigistics Consulting

At its MEPC70 meeting in October 2016, the International Maritime Organization (IMO) announced that it will implement the 0.5% Global Sulfur Cap starting on January 1, 2020. The new regulation is part of the MARPOL Annex VI regulation (FIG. 1). Fig. 1. IMO MARPOL Annex VI sulfur limits. In an effort to better inform the industry of the IMO’s decision, the authors delivered a rigorous analysis in mid-2016 on the likely implications of implementing the regulation in 2020.1 Decreasing the allowable percentage of sulfur in marine fuels consumed in international (non-emissions control area, or ECA) waters from 3.5% to 0.5% represents a profound chan

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